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U.S., GERMANY DENY CONSPIRING TO BLOCK LOAN GUARANTEES TO ISRAEL

The United States and Germany are denying reports of an allied conspiracy to deny Israel loan guarantees to help resettle thousands of Jews from the former Soviet Union.

The reports, which have cropped up sporadically in the Israeli press since September, again appeared following the recent collapse of U.S.-Israeli negotiations on a requested $10 billion in guarantees. President Bush has refused to support the guarantees unless Israel freezes Jewish settlements in occupied territories - a linkage the government of Prime Minister Yitzhak Shamir has rejected.On Wednesday, Israel's largest newspaper, Ma'Ariv, reported that the United States had called on German Chancellor Helmut Kohl and heads of the European Community to block Israel from getting some of these guarantees, including a purported $3 billion from Germany. That prompted Rabbi Alexander Schindler, president of the Union of American Hebrew Congregations, to ask Bush in a letter to answer the charge "promptly and publicly."

"There has been absolutely no pressure of any sort from the U.S. side on Germany concerning this issue," German Embassy spokesman said Friday. U.S. officials also said that they have not asked Kohl or any other European leader to hold up aid to Israel. The officials added that these assurances have been given to Israel and U.S. Jewish leaders in what one called "the most unequivocal terms."